Westlake Announces Record Quarterly and Full-Year Earnings for 2013
- Record quarterly net income of $171.0 million in the fourth quarter, or $2.54 per diluted share

- Record annual net income of $610.4 million, or $9.09 per diluted share

- Generated cash flow from operations of $752.7 million in 2013

HOUSTON, Feb. 20, 2014 /PRNewswire/ -- Westlake Chemical Corporation (NYSE: WLK) today reported net income for the three months ended December 31, 2013 of $171.0 million, or $2.54 per diluted share, compared to net income of $95.3 million, or $1.42 per diluted share, reported for the fourth quarter of 2012. Net sales for the three months ended December 31, 2013 of $951.6 million increased $150.6 million compared to net sales of $801.0 million in the same period of 2012, primarily due to higher sales prices for polyethylene, styrene and PVC resin and higher sales volumes for most of our major products. Income from operations was $257.6 million for the fourth quarter of 2013 compared to $156.2 million for the fourth quarter of 2012. The increase in income from operations in the fourth quarter of 2013 was primarily a result of higher polyethylene and PVC resin sales prices as well as lower ethane costs, which were partially offset by higher propane costs as compared to the same period in 2012.

Net income for the fourth quarter of 2013 of $171.0 million, or $2.54 per diluted share, increased $0.7 million from the $170.3 million net income, or $2.54 per diluted share, reported for the third quarter of 2013. Net sales in the fourth quarter of 2013 of $951.6 million decreased $52.6 million from net sales of $1,004.2 million in the third quarter of 2013, primarily as a result of lower sales volumes for polyethylene, PVC resin and building products, partially offset by higher polyethylene sales prices and higher ethylene sales volumes. Fourth quarter 2013 income from operations was $257.6 million as compared to $266.6 million reported for the third quarter of 2013, a decrease of $9.0 million. The decrease in operating income in the fourth quarter of 2013 as compared to the third quarter was primarily the result of lower integrated vinyls margins resulting from higher propane costs, which were partially offset by higher polyethylene sales prices.

For the year ended December 31, 2013, net income was $610.4 million, or $9.09 per diluted share, an increase in net income of $224.8 million, or $3.34 per diluted share, from 2012 net income of $385.6 million, or $5.75 per diluted share. Net sales for the year ended December 31, 2013 increased $188.5 million to $3,759.5 million compared to net sales for 2012 of $3,571.0 million, primarily due to higher sales prices for most products, higher sales volumes for styrene, caustic and PVC resin and sales contributed by the specialty PVC pipe business, which was acquired in May 2013. Income from operations was $953.5 million for the year ended December 31, 2013 as compared to $615.4 million for 2012, an increase of $338.1 million. Income from operations benefited mainly from higher olefins and vinyls integrated product margins, predominantly due to a significant decrease in ethane costs as average industry ethane prices decreased 34.3% in 2013 as compared to 2012. The increase in income from operations in 2013 was partially offset by the lost production and unabsorbed costs associated with the planned turnaround and expansion of one of the Lake Charles, Louisiana ethylene units in the first quarter of 2013.

Albert Chao, President and Chief Executive Officer, said, "We are pleased to report a strong finish to a record year for Westlake. We continue to benefit from lower-cost, ethane-based ethylene production resulting from increased North American natural gas liquids production, which we expect to continue for the foreseeable future. Our Olefins segment achieved record annual income from operations while our Vinyls business continues to improve, as we see gradual recovery in the construction industry. In 2013, we completed the expansion of one of our ethylene units at our Lake Charles, Louisiana site in the first quarter and also started-up our new world scale Geismar, Louisiana chlor-alkali plant in the fourth quarter. The completion of these two projects and the planned conversion to ethane feedstock and expansion of our ethylene and PVC capacity at our Calvert City, Kentucky facility in the second quarter of 2014 are expected to improve the profitability of our Vinyls business."

EBITDA (earnings before interest expense, income taxes, depreciation and amortization) of $302.7 million for the fourth quarter of 2013 increased $111.7 million compared to $191.0 million in the fourth quarter of 2012. EBITDA for the fourth quarter of 2013 decreased $4.3 million compared to EBITDA of $307.0 million in the third quarter of 2013. A reconciliation of EBITDA to reported net income and to net cash provided by operating activities can be found in the financial schedules at the end of this press release. EBITDA of $1,118.1 million for the year 2013 increased $345.3 million compared to EBITDA of $772.8 million for the year 2012.

Net cash provided by operating activities was $752.7 million in 2013. Capital expenditures for the year 2013 were $679.2 million. At December 31, 2013, we had cash, cash equivalents and marketable securities of $700.7 million and our long-term debt was $763.9 million.

OLEFINS SEGMENT

The Olefins segment reported income from operations of $247.3 million in the fourth quarter of 2013, an increase of $104.1 million compared to $143.2 million reported in the fourth quarter of 2012. The increase was primarily due to higher integrated olefins margins resulting from higher polyethylene sales prices and lower feedstock costs.

Income from operations for the fourth quarter of 2013 for the Olefins segment of $247.3 million increased $10.1 million from the $237.2 million reported in the third quarter of 2013. The increase was primarily due to higher polyethylene sales prices, partially offset by lower polyethylene sales volumes.

The Olefins segment reported income from operations of $833.2 million for the twelve months ended December 31, 2013 compared to $552.8 million in 2012. This increase was mainly attributable to higher integrated product margins as compared to 2012, primarily as a result of significantly lower feedstock costs. Income from operations for 2013 was negatively impacted by the lost production and expensing of $19.9 million related to unabsorbed costs associated with the planned turnaround and expansion of one of the Lake Charles ethylene units.

VINYLS SEGMENT

The Vinyls segment reported income from operations of $18.6 million in the fourth quarter of 2013 compared to income from operations of $18.2 million in the fourth quarter of 2012, an increase of $0.4 million. Operating income in the fourth quarter benefited from higher sales volumes for caustic and PVC resin. The fourth quarter of 2012 was negatively impacted by the lost PVC resin production and costs due to a scheduled maintenance turnaround at the Geismar vinyls complex.

The Vinyls segment reported income from operations of $18.6 million in the fourth quarter of 2013, a decrease of $21.0 million compared to income from operations of $39.6 million in the third quarter of 2013. The decrease in operating income in the fourth quarter was the result of higher propane costs and seasonally lower sales volumes for PVC resin and building products.

The Vinyls segment reported income from operations of $154.7 million in 2013 as compared to income from operations of $85.9 million in 2012, an increase of $68.8 million. This increase was predominantly driven by lower feedstock costs, higher sales volumes for PVC resin and higher operating rates as compared to 2012.

The statements in this release and the related teleconference relating to matters that are not historical facts, such as statements regarding cost advantages related to North American shale gas production and the conversion to ethane feedstock and expansion of our ethylene and PVC capacity in Calvert City, are forward-looking statements. These forward-looking statements are subject to significant risks and uncertainties. Actual results could differ materially, based on factors including, but not limited to: general economic and business conditions; the cyclical nature of the chemical industry; availability, cost and volatility of raw materials and utilities, including natural gas from shale production; uncertainties associated with the United States and worldwide economies, including those due to global economic and financial conditions; governmental regulatory actions, including environmental regulation; political unrest; industry production capacity and operating rates; the supply/demand balance for Westlake's products; competitive products and pricing pressures; access to capital markets; technological developments; the effect and results of litigation and settlements of litigation; operating interruptions; and other risk factors. For more detailed information about the factors that could cause actual results to differ materially, please refer to Westlake's Annual Report on Form 10-K for the year ended December 31, 2012, which was filed with the SEC in February 2013.

Westlake Chemical Corporation Conference Call Information:

A conference call to discuss Westlake Chemical Corporation's fourth quarter and full year 2013 results will be held Thursday, February 20, 2014 at 11:00 a.m. Eastern Time (10:00 a.m. Central Time). To access the conference call, dial (866) 515-2908, or (617) 399-5122 for international callers, approximately 10 minutes prior to the scheduled start time and reference passcode 17392490.

A replay of the conference call will be available beginning four hours after its conclusion until 3:00 p.m. Eastern Time on Thursday, February 27, 2014. To hear a replay, dial (888) 286-8010, or (617) 801-6888 for international callers. The replay passcode is 35323816.